Ukraine in 2011

The year 2011 in Ukraine was dominated by the public trial of former prime minister Yuliya Tymoshenko. Her arrest was considered by many to have been politically motivated.

On May 24 Tymoshenko was charged with having abused the powers of her office during her tenure as Ukrainian prime minister by signing a gas deal in 2009 with Russian Prime Minister Vladimir Putin. The trial began the following month in Kiev. On August 7 former Ukrainian president Viktor Yushchenko testified on behalf of the government. The court found Tymoshenko guilty on October 11 and sentenced her to seven years’ imprisonment and a fine of $188 million. The EU promptly suspended a scheduled visit of Pres. Viktor Yanukovych to Brussels, having expressed its belief that the government of Ukraine should follow the rule of law. On October 13 new charges were brought against Tymoshenko, alleging that she had transferred some $400 million of debt from her company, United Energy Systems, to the government in 1996, when her then ally Pavlo Lazarenko was prime minister. The case also raised questions regarding the participation of Tymoshenko, who remained popular, in the parliamentary elections scheduled for October 2012. Indeed, shortly after the trial a survey showed Tymoshenko to be the most popular politician in the country, with committed support of 14.3%, compared with 11.9% for Arsenii Yatsenyuk, 10.2% for boxer and aspiring politician Vitali Klitschko, and 10% for Yanukovych.

Other trials also made news in 2011. In March former president Leonid Kuchma (1994–2005) was formally charged with abuse of power in connection with the murder of Georgy Gongadze, the editor of Ukrainska Pravda. In July the main suspect in that case, Oleksiy Pukach, formerly the head investigator for the Interior Ministry’s foreign surveillance units, was also put on trial. Meanwhile, the trial of former minister of the interior Yuri Lutsenko continued, following his arrest on Dec. 26, 2010, for allegedly having overpaid his chauffeur.

On October 27 the European Parliament proposed an EU-Ukraine meeting with the goal of achieving an association agreement between the two parties. A summit in December was inconclusive, with the EU president, Herman Van Rompuy, stating that the approval of such an agreement would be tied to “political cirumstances” within Ukraine.

GDP growth of 4.7% was predicted for the year, with inflation projected at 8.9%, but the economy in general was in difficulty. In March the IMF froze its quarterly payment to Ukraine of $1.5 billion because of the country’s failure to meet its agreed economic targets. In September Ukraine’s foreign-currency reserves dropped by 8.3% to $35 billion, which led the country to seek new loans. In late October an IMF mission arrived in Ukraine to discuss revisions to the standby program and a potential allocation of $3 billion in credit.

According to the International Organization for Migration, an estimated 6.5 million Ukrainians were working abroad. The average domestic wage in September was 2,700 hryvnya (about $337), but it averaged much lower in western regions. On October 1 the minimum wage was increased to 800 hryvnya (about $100) after taxes. Ukraine’s outlook for long-term foreign and currency default ratings was revised from “positive” to “stable” by Fitch on October 19, and the country dropped three places to 152 (out of 183 countries) in the World Bank’s annual “Doing Business” study, mainly because of uncertain regulations, excessive taxes, and red tape.

On April 26, 2011, the 25th anniversary of the calamitous nuclear accident at the Chernobyl power station in Ukraine, a flame at a monument in Kiev burns in memory of the accident’s victims.Efrem Lukatsky/APApril 26 marked the 25th anniversary of the Chernobyl disaster. A commemorative ceremony attended by President Yanukovych and Russian Pres. Dmitry Medvedev was held at the site of the abandoned nuclear plant, and a conference in Kiev attracted many world leaders. Yanukovych requested a further $1 billion in international aid to help construct a permanent roof over the destroyed fourth reactor. The European Bank for Reconstruction and Development (EBRD) had gathered $1.43 billion to date.

On September 29 the EBRD provided a loan of €200 million ($276 million) to the state company Ukrhydroenergo to help upgrade hydroelectric stations. Also that month, U.S. Secretary of State Hillary Clinton and Ukrainian Foreign Minister Kostiantyn Hryshchenko signed a memorandum of understanding on nuclear security whereby the U.S. would provide technical and financial assistance for the elimination of Ukraine’s enriched uranium and for the improvement of civil nuclear research enterprises.

On July 29 a methane-gas explosion at the Sukhodilska-Vostochnaya coal mine in eastern Luhansk killed 17 miners. On October 8 Yanukovych and Colombian pop star Shakira opened Kiev’s new association football (soccer) stadium, which was set to host the 2012 finals of the European Championship.